Microsoft names cloud computing chief as next CEO

February 5, 2014

LOS ANGELES - Microsoft has named the head of its cloud computing business as the company's next CEO, tapping a longtime insider to lead efforts to catch rivals in mobile devices and offer more software and services over the Internet.

Satya Nadella replaces Steve Ballmer immediately to become only the third chief executive in Microsoft's 38-year history. Company founder and first CEO Bill Gates is leaving his role as chairman to serve as an adviser. He will spend a third of his time working on future products and technology.

Nadella, 46, most recently headed the company's small but growing cloud computing unit, in which customers buy software and services housed on distant servers connected to the Internet. It's a departure from Microsoft's roots making software installed directly on personal computers.

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AP PHOTOThis May 21, 2008 photo, Microsoft Senior Vice President of Portal and Advertising Platform Group Satya Nadella demonstrates some of the features of Live Search on a mobile device during the advance08 Advertising Leadership Forum at the company's campus in Redmond, Wash. Microsoft announced Tuesday, that Nadella will replace Steve Ballmer as its new CEO. Nadella will become only the third leader in the software giant's 38-year history, after founder Bill Gates and Ballmer. Board member John Thompson will serve as Microsoft's new chairman.

In addition to growing that business, one of Nadella's first tasks as CEO will be the completion of Microsoft Inc.'s $7.3 billion purchase of Nokia's phone business and patent rights - part of a plan to boost Windows Phone software in a market dominated by iPhones and Android devices.

The direction points the company toward an orbit occupied by rivals Google Inc., Apple Inc. and Amazon.com Inc. and away from the core PC business that has been Microsoft's mainstay.

"Going forward, it's a mobile-first, cloud-first world," Nadella said in a video accompanying the announcement Tuesday.

Nadella, who has worked at Microsoft for 22 years, vowed to remove any obstacles that prevent the company from innovating and said he would capitalize on Microsoft's experience in making the industry's leading productivity software package, Office.

"We need to be able to pick the unique contribution that we want to make," he said. "That's where our heritage of having been the productivity company ... is what we want to get focused on."

Gates, meanwhile, will remain on the company's board. The new Microsoft chairman will be board member John Thompson, who led the search for a new CEO after Ballmer said in August that he planned to step down.

Thompson said Nadella was the board's "first and unanimous choice." Other candidates considered included Ford CEO Alan Mulally and other insiders such as Chief Operating Officer Kevin Turner and former Skype head Tony Bates.